16th June 2014
June’s Expert Advice- Elite Electronic Systems
Obsolescence Management
A proactive approach to managing risk and minimising disruption to production.
The life span of many modern consumer electronic devices, such as a mobile phone or tablet is relatively short. This can be from a matter of months to a few years. The need to change and an inherent ability to fall out of fashion is driving the development of new components within consumer electronics.
This rapid rate of change has generated a particular problem of obsolescence management in industries where long-term manufacturing of a product may be required for periods of 5, 10 or even 20 years. Medical device manufacture is one such industry where obsolescence management is a vital role played by the electronics manufacturer. The industry’s drive for smaller, faster and more flexible devices with more functionality is one thing, however, set this against a background of decreasing healthcare budgets and the result is a system which will utilise equipment which still performs adequately, with an added premium on the maintenance programmes which are vital to ensure continued reliable service. The present system encourages medical OEMs to focus on a long term manufacturing strategy rather than on continuous upgrades or revisions.
The key observation that “many medical devices have longer lifecycles than the components used to make them” highlights just how critical managing obsolescence is.
What is Component Obsolescence in the Medtech Industry?
Obsolescence in the medical industry generally occurs as a result of the ‘slowly evolving’ medtech industry relying upon a supply chain which has been developed to support a rapidly changing industry like consumer electronics. This problem is further exacerbated by considerably lower production volumes over longer timescales compared to consumer electronics for example where OEMs expect a quick turnaround in significant volumes.
There are a number of factors which drive obsolescence:
Market Change – All markets change and demand alters for many different reasons. With electronics generally piggybacking on the consumer products, markets are dynamic thus changing the demand for components. In a slow burn market like medtech this change in demand for components or in some cases the cessation of production of components because of a lack of demand is common.
Technological Evolution – A new and mostly further developed generation of technology will inevitably replace older technologies impacting on availability. Technologies with a high rate of innovation will inevitably suffer higher rates of component obsolescence.
Technological Revolution – In an increasing number of cases old technology is being completely replaced by new. Consider the implication of this on a medical company who after a design phase build prototypes, secure CE marking and then enter a period of clinical trials. This can last beyond 18 months and it is well known that advances in technology do not stand still.
Obsolescence and Medical Devices
Most consumer electronics have lifecycles of 18 months, whereas many medical devices have a product life in excess of 10 years. This simple statement of comparison between consumer electronics and medical devices illustrates the complexities of obsolescence management in this area.
It is important to consider just what this statement means and why obsolescence management is such a vital component provided to any OEM.
Medical Devices are typically not subject to technology upgrades. High costs and long development times associated with the product development cycle make this prohibitive. In medical device manufacture it is common to encounter some considerable obstacles to modification and systems upgrades in order to maintain a device.
The first obstacle to consider is based around the number of medical devices which contain ‘safety critical’ components. The critical components are subject to a lengthy and costly qualification and verification process even for minor changes before the manufacturing phase can begin.
One of the key roles for any Electronics Manufacturing Solutions (EMS) provider is sourcing components for their customers. As discussed the components are rapidly undergoing technology advancements both in performance and size. These rapid changes present a challenge to every EMS provider in keeping their customers up to date with changes especially when dealing with components which are approaching obsolescence. This is especially relevant when working with OEM’s who manufacture medical devices.
Jackie Beresford, Operation’s Manager at Elite Electronics Systems in Enniskillen, Northern Ireland outlines the processes which Elite have implemented to keep their customers ahead of the game.
The process of obsolescence management begins at the quoting stage. An experienced quoting team with an excellent understanding of component management will work closely with key suppliers to identify components which may face obsolescence in the short to medium term, or which may be hard to source as production approaches. At that early stage in the process, Elite will pass this information to potential customers and in some instances make recommendations on alternative components.
Jackie explains, “as manufacturers we understand the process and financial implications of components going obsolete, during production. The excellent relationships we maintain with suppliers enable us to identify component sourcing and obsolescence at a very early stage and present that information as part of the quote.”
Raising the issue of obsolescence early in the process has major benefits for the OEM’s whether they choose to work with Elite or not.
Obsolescence is a more pressing issue with Elite’s existing customers, most of whom have been manufacturing with Elite for a considerable period of time.
Component obsolescence for many of these longstanding customers is inevitable and Elite works very closely with suppliers and customers to manage obsolescence and reduce any risk associated with obsolescence.
Elite Electronic Systems